Culture and Economy: Toward An East Asian Model

1
Culture and Economy Toward An East Asian Model?

• Allison Gleue

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Why Are Cultural Factors Sometimes Ignored?

• Underlying assumptions of economics
• Danger of stereotypes
• More difficult to provide hard empirical evidence

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Does Culture Explain Development?

• Some analysts have blamed any trend in the Asian
  economy on Confucian or Asian culture
• Weber blames Confucian culture for early lack of
  development in China
• Tai and others link Confucian culture to the
  development of Japan and the 5 tigers
• Some analysts blamed Confucian culture for 1997
  crisis

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Positive Attributes of Asian Culture for
Development (Dore)

• Will to Develop compared to Latin America
• Advantages of backwardness
• Attitudes towards Authority
• Social Cohesion
• High levels of interpersonal trust
• Desire to understand new technologies

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Weber-Parsons Paradigm

• Asian Economic Development human emotional
  bonds, group orientation, harmony
• Western Economic Development efficiency,
  individualism, dynamism
• Webers Protestant Work Ethic

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Weber-Parsons Paradigm

• Affectivity v. affective neutrality
• Self-orientation v. collective orientation
• Universalism v. Particularism
• Achievement v. ascription
• Specificity v. diffuseness

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The Affective Model

• Cultural explanation of why East Asia is
  economically successful
• Claims Westerners do not properly understand
  Confucianism
• Human Relations above all else
• Family
• Company
• Personal Savings
• Human Resources

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Family

• Family loyalty the basis of society the nation
  viewed as extended family
• Confucian code explains how each member of the
  family would act towards each other
• Most businesses owned and operated by families
• Unrelated individuals often absorbed into
  business/family structure in Japan Lemoto
  principle

9
Company Structured Like Family

• Paternalism
• Large bonuses for performance, seniority pay
  scale, evaluations based on loyalty
• More fringe benefits and social activities
• Employees expected to share feelings and
  participate in each others lives

10
Personal Savings

• Highest in savings to GDP ratio in world
• Increases business investment and restrains
  inflation
• Confucian values encourage production while
  discouraging consumption -EOI

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Investing in Human Resources

• Confucius writings emphasized value of universal
  education
• Intellectuals socially esteemed
• Tradition of meritocracy in civil service
• Companies invest in employees
• More engineers

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Critiques of Cultural Approach

• Berger, Gross National Product and The Gods
• -Argues that capitalism is conditioned by the
  society in which it operates
• -Economic culture can create time-specific
  comparative advantages
• -If culture is the determining factor then East
  Asian model not exportable
• -External factors affect culture

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Critiques of the Cultural Approach

• Fukyama, Asian Values and Asian Crisis
• - Potential to be used an as excuse for
  autocracy/human rights violations universalism
  v. relativism
• - Confucianism can be interpreted many ways is
  it religion or culture?
• - Ignores huge cultural variations among East
  Asian countries

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Discussion Questions

• What are the advantages and disadvantages of
  cultural explanations?
• How much does culture matter in determining the
  potential for economic growth in a country?
• Do you think the rational model or the affective
  model are applicable to other developing
  countries?